Correlation Between Compania Cervecerias and Yancoal Australia

Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Yancoal Australia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Compania Cervecerias and Yancoal Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compania Cervecerias Unidas and Yancoal Australia, you can compare the effects of market volatilities on Compania Cervecerias and Yancoal Australia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Compania Cervecerias with a short position of Yancoal Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Yancoal Australia.

Diversification Opportunities for Compania Cervecerias and Yancoal Australia

0.0

Correlation Coefficient

Compania Cervecerias  Yancoal Australia

Pay attention - limited upside

The 3 months correlation between Compania and Yancoal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Yancoal Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yancoal Australia and Compania Cervecerias is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Compania Cervecerias Unidas are associated (or correlated) with Yancoal Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yancoal Australia has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Yancoal Australia go up and down completely randomly.

Pair Corralation between Compania Cervecerias and Yancoal Australia

If you would invest  1,095  in Compania Cervecerias Unidas on September 25, 2024 and sell it today you would earn a total of  65.00  from holding Compania Cervecerias Unidas or generate 5.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Compania Cervecerias Unidas  vs.  Yancoal Australia

Compania Cervecerias

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compania Cervecerias Unidas are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Compania Cervecerias may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Yancoal Australia is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Compania Cervecerias and Yancoal Australia

The main advantage of trading using opposite Compania Cervecerias and Yancoal Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Yancoal Australia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yancoal Australia will offset losses from the drop in Yancoal Australia's long position.

The idea behind Compania Cervecerias Unidas and Yancoal Australia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.